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The Cost of Cure for COVID-19

Context: The World Health Organisation declared the COVID-19 outbreak a pandemic. However, the U.S. Food and Drug Administration (FDA) declared COVID-19 an orphan disease, or a rare disease.

Orphan drug act in USA:

Privileges under the Act are conferred to companies for drugs to treat a disease that affects less than 200,000 people.

Regulations for revocation: if the number of people suffering from the disease exceeds 200,000 after designation but before approval, this would not be a ground for revocation.

If a disease is rare: Companies are provided incentives to develop therapies, or orphan drugs, for rare diseases. Without these incentives, companies find it difficult to recoup their R&D costs given the small number of people suffering from the rare disease.

For instance in The USA, companies get incentives under the Orphan Drug Act, 1983.

The Act allows seven years of market exclusivity and financial incentives to innovators of these drugs.

Purpose of the act : To provide financial incentives for drugs that may reasonably expect to generate relatively small sales.

It was originally developed to treat Ebola but found ineffective, the drug is now being tested for treating COVID-19.

Gilead is reported to have said that it intends to make the drug accessible and affordable around the globe.

The issues :

How did the Orphan drug Act apply to a potential drug for COVID-19, which is not a rare disease, with 800,049 confirmed cases across the world?

How does the U.S. FDA justify conferring the status of an orphan drug on a therapy designed to treat COVID-19?

Is it legal to apply the benefits of a statute to something entirely outside its stated objective and purpose?

Impact on US and India:

Impact of this orphan drug status: Generic manufacturers would not have been able to market a drug to treat COVID-19 with the same active ingredient till the seven-year period of market exclusivity had ended.

Disastrous consequences on the healthcare system: Declaring it as orphan drug would have given Gilead free rein on pricing and licensing

Gilead Sciences holds a patent in India: However, Indian law permits the government to issue a compulsory licence in certain circumstances of a public health crisis under Section 92 of the Patents Act. This would allow third parties to manufacture a patented drug without permission of the patent holder.

Intellectual Property Rights

Intellectual property rights (IPR) are the rights given to persons over the creations of their minds: inventions, literary and artistic works, and symbols, names and images used in commerce.

They usually give the creator an exclusive right over the use of his/her creation for a certain period of time.

These rights are outlined in Article 27 of the Universal Declaration of Human Rights, which provides for the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.

The importance of intellectual property was first recognized in the Paris Convention for the Protection of Industrial Property (1883) and the Berne Convention for the Protection of Literary and Artistic Works (1886).

Both treaties are administered by the World Intellectual Property Organization (WIPO)

Patent: A patent is a form of intellectual property that gives its owner the legal right to exclude others from making, using, selling and importing an invention for a limited period of years, in exchange for publishing an enabling public disclosure of the invention.

National Intellectual Property Policy 2016

Creative India Innovative India: It lays the future roadmap for IPRs in India. The Policy recognises the abundance of creative and innovative energies that flow in India, and the need to tap into and channelize these energies towards a better and brighter future for all.

The Policy aims to realise IPR’s as a marketable financial asset, promote innovation and entrepreneurship, while protecting public interest.

In order to have strong and effective IPR laws, steps would be taken — including review of existing IP laws — to update and improve them or to remove anomalies and inconsistencies.

India will engage constructively in the negotiation of international treaties and agreements in consultation with stakeholders. The government will examine accession to some multilateral treaties which are in India's interest, and become a signatory to those treaties which India has de facto implemented to enable it to participate in their decision making process.

It suggests making the department of industrial policy and promotion (DIPP) the nodal agency for all IPR issues. Copyrights related issues will also come under DIPP’s ambit from that of the Human Resource Development (HRD) Ministry.

The Policy also seeks to facilitate domestic IPR filings, for the entire value chain from IPR generation to commercialisation.

It aims to promote research and development through tax benefits.

It also says “India will continue to utilise the legislative space and flexibilities available in international treaties and the TRIPS Agreement.” These flexibilities include the sovereign right of countries to use provisions such as Section 3(d) and CLs for ensuring the availability of essential and life-saving drugs at affordable prices.

As per the WTO norms, a Compulsory Licensing can be invoked by a government allowing a company to produce a patented product without the consent of the patent owner in public interest.

Under the Indian Patents Act, a CL can be issued for a drug if the medicine is deemed unaffordable, among other conditions, and the government grants permission to qualified generic drug makers to manufacture it.

There are seven Major objectives:

IPR, awareness, outreach, and promotion

Create an atmosphere of invertibility and innovation

Replace existing outdated laws

Human Capital Development for teaching, research and skill building in IPRs

Administration and management of innovation

Commercialization of IPRs

Combating IPR infringements by reinforcing the enforcement and adjudicatory mechanisms

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